As Persimmon updates the market, Ian Forrest, investment research analyst at The Share Centre, explains what it means for investors.
“In a fourth quarter trading update today housebuilder Persimmon reported an 8% rise in full year revenues to £3.14bn and said average selling prices rose by 4% to £206,700. Interested investors should appreciate that demand for houses has actually increased since the EU referendum last June with the forward sales book up 12% on this point last year to £1.23bn. The group’s confidence was underlined by news that it has acquired a further 18,700 plots and opened 255 new development sites during the year.
These were good, solid results from Persimmon with a fairly upbeat tone on future prospects. We do however, continue to recommend Persimmon as a ‘hold’ as both demand and supply factors keep the outlook for this company, and the wider house building sector, positive due to the shortage of affordable homes in the UK and favourable government policy to the sector.
While there has been a limited affect from Brexit so far the longer term risk to the UK economy created by the UK’s decision to exit the European Union remains so we continue to regard the shares as higher risk.”
